Tuesday, April 07, 2009

The death of User Generated Content may be greatly exaggerated

I wonder sometimes about Sarah Lacey. On TechCrunch, she goes into great detail about how "user generated content" doesn't make money, and how its promise to help talented people hasn't come to fruition....

Oh, really? Lacey's analysis doesn't make sense in that its view of UGC comes through a lens filtered by the old-school media's judgment of value based on currently failing business models.

The thing about UGC is that what one expects from it is far broader than Lacey's claim that it must make money or lead directly to some fairy tale of overnight success. That's not what most UGC producers think of their work, and not what most UGC producers get from their efforts.

Now, I've been in the UGC business for a bit here, with my blog and various contributions to publications like Huffington Post and Silicon Alley Insider and syndication through Newtex. I'm not looking to make money from any of these ventures, although I do make a small bit from Newstex. What I get from this is influence and jobs. And had I been a bit wiser, and really liked doing journalism of some form, I'd probably be writing a column like Lacey's by now. In one respect, that's maybe where I wasn't so smart, but who knows what the future holds.

The true value of UGC is determined by the creator, and not necessarily by those curating it. The value of UGC is not determined by how much money YouTube makes, or what Twitter's business model happens to be. The value of UGC is determined by the "user" who is creating it, at any point in time, in any medium that person chooses.

The value of UGC cannot be determined by externals--but only by the ones who are creating. It may shatter some dreams if it isn't creating the overnight success, but it is also helping those who want to actualize realistic dreams and goals, as well as those who are overqualified and under-employed who simply want to share content with others.

However, in a recent conversation with Mark Ranalli of Helium.com, I've seen how properly managed UGC (he hates the term too) can create value for both the UGC producer and the site that curates UGC. And I'm working on a new venture that has a strong UGC component to it (can't say much more now.) What I can say is that if UGC is managed properly by a "broker" or third-party, it can make money. The key is to understand why it is produced, and to reward UGC that is of value--the value to be determined by the community. Most who've been in the MSM, who are looking at the outside of the UGC busienss, really don't get it, don't get the reasons why people do it, how to filter it, the value of community in helping to determine value, and then how to turn the filtered content around to the benefit of everyone involved.

Mainstream media just doesn't get the process of creating value from UGC. Perhaps it's because it's swallowed its own hype and Horatio Alger stories, and has a need to create value *right away* to shore up sagging profit margins. Maybe the creation of media isn't meant to make a big profit for a bunch of other people who have nothing to do with it.

I'm just sayin'....

A note about Steve Outing's UGC venture: yes, Steve's venture didn't make money. IMO, it was a bit ahead of its time, and may not have reached the right niche audience. There are so many variables to the UGC equation and its hard to know where communities that produce strong content will congregate, as well as the time it will take to create that community. We're only seeing some of the answers to those variables now and on small scales.


Dustin Plett said...

Hi Tish,

I also read the TechCrunch piece and felt as if the mark had been missed. I feel that UGC is at its most exciting point right now because people are figuring out how to generate real returns. I just have to point to one of the thousands of UGC based promotions, contests or UGC built into a successful campaign to prove that the medium is not dead. Thank you for your insightful blog.

Dustin Plett
Check out this blog I write about new UGC. It is for ICUC Moderation Service.


Tish Grier said...

Thanks Dustin! and you're right about people generating returns. UGC is *people* not organizations :)

Jim Neill said...

Great points. Applying increasingly obsolete and archaic business models and a narrow definition of "value" to the world of UGC is simple-minded. Hey, why educate the skeptics? If they don't get it, they simply won't be participating in the amazing transformation of "media" that's underway. There's never been a better time for a collective consciousness to take hold in the physical world instead of the metaphysical.

Tish Grier said...

We are definitely seeing collective consciousness manifest in so much of the online world. I find it fascinating!

Anonymous said...

How does a site like Huffington Post fit into the UGC model? The blog posts and comments seem to be the dominant time suckers on that site. And some of the "news" items appear to be blog posts that gather and report news.

Just wondering if that site might be the preeminent model Based on all the advertising, they seem to monetizing it.